Microchips (or semiconductors) are the backbone of modern technology, powering a wide range of devices, from smartphones and vehicles to healthcare systems and advanced military applications. They also play a critical role in energy infrastructure, mobility solutions and communication networks. As digitalisation accelerates, the importance of semiconductors to Europe’s economy and security has never been greater. The EU has huge ambitions in this area and is striving to achieve a 20 % share of the global microchip market value chain. Our auditors have scrutinised the effectiveness of its strategy for catching up with the global leaders and securing a resilient and competitive European microchip industry.

The EU has long recognised the strategic importance of semiconductor manufacturing. Since the launch of its semiconductor strategy in 2013, Europe has made progress in expanding its microchip production capacity. The COVID-19 pandemic exposed the region’s vulnerabilities, as supply chain disruptions led to severe chip shortages, affecting industries ranging from the automotive to consumer electronics.

To address these challenges, the EU introduced the Chips Act in 2022, an ambitious initiative designed to strengthen Europe’s semiconductor industry, enhance its production capabilities, and reduce reliance on foreign suppliers. This initiative culminated in the Chips Act regulation aimed at reinforcing the EU’s position in advanced microchip manufacturing, which entered into force in September 2023. However, amid strong competition from global semiconductor leaders like the United States, Taiwan, South Korea and China, implementation of the Chips Act has met with challenges.

One of the challenges the EU faces is its reliance on foreign raw materials, such as silicon wafers and rare earth elements, which are essential for chip manufacturing. This dependency is one of several factors affecting the resilience of Europe’s semiconductor industry. Supply chain uncertainty is increasing due to geopolitical tensions, trade restrictions and growing global demand, further intensifying the challenges the EU faces.

In this context, as the global demand for semiconductors continues to rise, the EU faces a pivotal moment in shaping and determining its position in the ever-evolving microchip sector. Will the Chips Act be enough to reinforce the EU’s standing in semiconductor production, or will external pressures and internal challenges impede its success?

Stay tuned to find out the answer on 28 April 2025, when we will publish a special report on the EU’s semiconductor ambitions, the effectiveness of the Chips Act, and the road ahead for the EU’s microchip industry.